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Financial, Legal, Insurance & Management ServicesGeneration Y’s Retirement Struggles
Retirement planning for Generation Y is starting out rough. With many Millennials coming out of college with mounds of student loan debt, the last thing they are thinking about is saving for retirement. These young people are exiting college into the worst economic outlook since The Great Depression...
Retirement planning for Generation Y is starting out rough. With many Millennials coming out of college with mounds of student loan debt, the last thing they are thinking about is saving for retirement. These young people are exiting college into the worst economic outlook since The Great Depression. They see people with more experience than themselves not able to find jobs or if they do find employment, those jobs don’t pay much. It’s a bleak outlook for Generation Y retirement for other reasons as well.
- By the time these young people reach retirement age there might not be any Social Security for them to draw from. This could mean that this generation will have to work well past the retirement age of 65 just so that they can survive.
- As reported by On Wall Street, this might be the first generation that is worse off than their parents. This is a very scary thought. Most parents want to see their children do better and achieve more than they themselves did but that might not be in the cards for the men and women of Generation Y.
- The ever-increasing cost of college coupled with the tight job market makes it hard for Generation Y to save money for their future. They have to worry about the here and now; many can’t even begin to think about what might happen 40 years down the road. With the pressures of finding a job and paying back substantial loans, retirement feels like something that they will never get to. It’s not that this generation doesn’t care about their future it is that they literally cannot afford to think about it yet.
What Can Be Done?
One of the only things that can really be done is to educate Generation Y on self-directed IRAs, and similar retirement plans, and more importantly, how to save for them. Financial advisors need to reach out to this demographic and make it possible for them to work with financial planners.
Saving for retirement needs to be thought of early and often. Even just putting a couple of dollars a month in a retirement savings account can be extremely helpful in the future. Whether young adults are choosing traditional IRAs or Roth IRAs, there are choices they should review with a financial planner to determine what works best for them. As an administrator of self-directed retirement plans, Next Generation Trust Services is always here to answer questions about various types of retirement plans as well. And we all agree that no matter how tough the road ahead might look now, saving early and often paves the best way to a more comfortable future.